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This article first appeared on GuruFocus.
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Net Income: $35.2 million, a 17% increase from last year.
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Earnings Per Diluted Share: $1.57, a 28% increase from last year.
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Return on Average Assets: 1.87%, compared to 1.61% last year.
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Return on Average Tangible Equity: 26.7%, compared to 25.5% last year.
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Deposits: $6.4 billion, a $170 million decrease from last year.
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Loans and Leases: $5 billion, up from $4.6 billion last year.
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Commercial Finance Loans Increase: $531 million.
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Consumer Finance Loans Decrease: $148 million.
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Loan Originations: $1.9 billion, with $678 million in commercial finance and $1.2 billion in consumer finance.
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Net Charge-Offs: 2 basis points on an annualized basis, excluding tax services loans.
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Allowance for Credit Loss Ratio in Commercial Finance: 116 basis points, slightly improved from 118 basis points last year.
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Liquidity: $3.7 billion available.
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Share Repurchases: Approximately 652,000 shares at an average price of $72.07.
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Fiscal Year 2026 EPS Guidance: Increased to a range of $8.55 to $9.05.
Release Date: January 22, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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Pathward Financial Inc (NASDAQ:CASH) reported significant growth in core business areas, including interest income and commercial finance, with a lower provision for credit losses.
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The company achieved a return on average assets of 1.87% and a return on average tangible equity of 26.7%, showing improvement from the previous year.
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Pathward Financial Inc (NASDAQ:CASH) has a strong liquidity position with $3.7 billion available, and they repurchased approximately 652,000 shares, indicating confidence in their financial health.
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The company has a robust pipeline of new partners and is optimistic about future growth, with a focus on multi-threaded approaches to partner relationships.
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Pathward Financial Inc (NASDAQ:CASH) increased its fiscal year 2026 EPS guidance to a range of $8.55 to $9.05, reflecting confidence in their business strategy and market conditions.
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The sale of the consumer finance portfolio resulted in an $11.9 million reduction to net interest income, impacting several income statement line items.
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Net interest margin was affected by the gross-up amount from consumer loans, creating a complex financial picture.
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The company experienced a decrease in rental income due to lower balances and operating leases, although this was offset by lower operating lease equipment depreciation.
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Non-performing loans ticked up slightly compared to the previous quarter, although the company maintains that this does not indicate a systemic issue.
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The government shutdown caused a delay in secondary market revenues, impacting the company’s financial performance for the quarter.
Q: What is the expected trajectory for the Net Interest Margin (NIM) in the upcoming quarters? A: Gregory Sigrist, CFO, explained that the adjusted NIM trajectory has been upward, with the current quarter at 5.49%. The expectation is for the NIM to remain flat or increase, assuming the macroeconomic environment remains stable and the middle part of the yield curve stays elevated.
Q: Can you provide insights on the impact of fintechs obtaining bank charters on Pathward’s business? A: Brett Pharr, CEO, noted that while fintechs obtaining bank charters could be seen as a threat, it takes significant time and resources to build the scale needed to compete with Pathward. He emphasized that Pathward’s multi-threaded approach and broad product offerings provide a competitive advantage.
Q: Is Pathward involved in digital assets, and what role does the company see for itself in this space? A: Brett Pharr, CEO, stated that Pathward is already involved in the crypto space by facilitating fiat currency transactions but does not currently hold digital assets. The company views digital assets as an additional payment rail and is exploring opportunities with partners.
Q: What is the growth potential from new partner announcements made in 2025? A: Gregory Sigrist, CFO, mentioned that the new partners are expected to contribute mid- to high-single-digit growth in card fee income over a 12-month period. The company is optimistic about the pull-through from these partners and expects continued growth.
Q: How does Pathward view the current credit environment, and are there any concerns about non-performing loans? A: Brett Pharr, CEO, assured that there are no systemic issues with non-performing loans, as they are spread across different asset classes. The company focuses on collateral management, which mitigates risks associated with non-performing loans.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.